7 Insurances To Protect You And Your Business
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Running a successful business entails a lot of multitasking and adapting to changing market conditions. Given the dynamic nature of this, it’s common for entrepreneurs to slip and make some costly mistakes.
For instance, customers could get injured by your services, staff could become permanently injured, and sales could start slowing down.
In either of these cases, your business finances could face a downward spiral. While these instances (or other similar cases) are inevitable, there are ways you can financially safeguard your business before they occur.
One such way is by getting the right insurance policies. Insurance can step in and cover certain financial outlays that your business may incur unexpectedly.
With the right insurance, you can overcome situations that would’ve otherwise financially ruined you and your business.
Unsure what insurance policies to get? Here are seven of the best insurance policies you should get to protect you and your business.
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Workers’ Compensation Insurance
Workers’ compensation insurance is a mandatory insurance policy for business owners who have employees. This insurance policy provides financial protection to employees who become injured or ill from their job.
Specifically, this insurance covers medical expenses, rehabilitation costs, and lost wages that the employee may have earned if they hadn’t fallen ill or become injured. This insurance is necessary for businesses in all industries, from the farming sector to the financial sector.
Besides being legally mandated, business owners should get this insurance policy to help give employees timely medical care and financial support during their time of need.
Besides aiding them financially, this insurance prevents them from filing a lawsuit against you and going after your personal assets. It also reinforces an environment that demonstrates care for your employees’ well-being, which can lead to a happier and more productive workforce.
In Australia, each state and territory has separate regulating bodies that regulate the rules behind workers’ compensation insurance coverage. It's best to familiarise yourself with your state’s insurance regulatory authority to ensure that you’re providing ample and legally recognised coverage to your employees.
For contractors, sole proprietors, and self-employed individuals, there are separate laws surrounding your workers’ insurance policy. You can’t use the aforementioned insurance policy to cover for yourself since you’re running your own business.
Familiarise yourself with the intricacies of your state’s insurance policy and apply for this insurance policy as soon as you can.
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Public Liability Insurance
Public liability insurance provides financial coverage for the greater public. In particular, it covers legal expenses, compensation claims, and medical costs that a third party may sustain inside the premises of your business or as a result of your product or service.
For instance, if a customer slips in your store and you don’t have a wet floor sign posted, they could technically sue you for damages if they have sustained an injury because of it. When they do file a lawsuit against you, public liability insurance can cover the medical and legal bills associated with this incident.
For certain industries, public liability insurance is mandatory, especially when you constantly deal with the public. Regardless of your industry, it’s best to have this insurance policy activated to ensure that you have financial coverage in case customers or clients get injured during their visit to your property.
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CTP Vehicle Insurance
If you own a business vehicle, then you’re legally required to have CTP insurance (also known as a green slip) in Australia.
This insurance covers legal fees, medical expenses, and other forms of damage if a third party becomes injured or sustains damage because of your motor vehicle.
For instance, if your employee has accidentally skidded the company vehicle off the road and hit someone’s mailbox, this insurance policy will cover the repair of that mailbox.
If someone becomes injured because of your business vehicle, then CTP insurance covers a portion of the medical cost. This will depend on the agreed-upon coverage amount before signing the contract.
This insurance policy doesn’t only keep your business’s finances lean, but it also helps maintain your business’s reputation by providing financial compensation to injured parties. This gives you peace of mind knowing that unforeseen vehicular accidents can be addressed appropriately.
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TPD Insurance
If your only source of income is your business, then you know how devastating it can be to stop working and watch your savings dry up. This is especially true if you have a family to take care of.
However, there’s a non-zero chance for life to throw a life-changing curveball at you. You can end up in an accident or be diagnosed with a condition that can lead to total and permanent disability.
In such a case, TPD insurance can help you by providing a lump-sum statement that helps you cover rehabilitation costs, medical costs, and income loss. This insurance can be claimed if you’ve developed your injury inside or outside a work setting.
Once you claim a payout, ensure that your taxes are properly filed to avoid penalties. You can use Curo's TPD taxation calculator to accurately calculate your payable TPD taxes.
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Commercial Property Insurance
Do you own the building where your business is operating? Then it’s in your best interest to have commercial property insurance set up to protect your building and its contents.
This type of insurance helps cover the costs of your assets when external events have caused damage to your property. This type of catastrophe can be caused by natural disasters, like fire, flooding and earthquakes. It may also be criminal events, like burglary, vandalism or arson.
In either case, commercial property insurance covers the cost of property damage up to the agreed-upon amount. This can help your business bounce back with minimal disruption since you no longer have to pay for inventory replacements or repairs out of pocket.
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Business Income Insurance
If business operations have ceased because of a natural disaster, then business income insurance (also known as business interruption insurance) can temporarily substitute your income.
This insurance provides financial compensation for various business expenses and losses, such as lost revenue and ongoing expenses like wages and utilities.
This coverage can help your business stay afloat in the event of sudden and fortuitous events. It gives you a lump sum amount to pay recurring expenses like rent and wages. It also grants you a capital injection to help you fix your business and resume operations smoothly.
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Professional Liability Insurance
Also known as errors and omissions insurance (E&O insurance), professional liability insurance covers you if your client or customer has claimed that you’ve been negligent or committed malpractice in your service, causing financial losses to your client.
Specifically, this insurance covers the finances needed to settle these damages, including medical and legal costs. For instance, if you are a consultant and your advice has caused thousands of dollars of losses to your client, they can sue you for the damages.
Without this insurance, you will have to shell out the funds from your own pocket. However, with this professional liability insurance, you can financially protect yourself and your business by covering the fees associated with the lawsuit.
For professionals like lawyers, doctors, and engineers, this insurance is a good one to have since it protects you in case you make any costly mistakes for your patients and clients. Even if you’re careful and are committed to providing only the best for your client, mistakes can and will happen throughout your career, so having this coverage can provide peace of mind.
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